Telcos fuming over Telstra access win

Telcos fuming over Telstra access win

Summary: The Australian Competition Tribunal's (ACT) decision to wind back regulated access to Telstra's wholesale network has outraged the telecommunications sector.

SHARE:

The Australian Competition Tribunal's (ACT) decision to wind back regulated access to Telstra's wholesale network has outraged the telecommunications sector.

The ACT yesterday issued a statement claiming there was sufficient competition in certain metropolitan areas to wind back regulated access to Telstra's wholesale network in them.

The ACCC will now publish a biannual list of the areas where Telstra will not be obligated to provide access to its competitors. The tribunal's decision was based on the view that competition from internet service providers (ISPs) who had installed their own ADSL equipment at Telstra's exchanges, meant that the ACCC could step away from its role of ensuring Telstra gives access.

"Whether an exemption will apply in a particular area will depend on a number of factors, including the number of Telstra's competitors already using the Unconditioned Local Loop Services in that area as well as their market share," the Tribunal noted.

While Telstra has welcomed the new rules of engagement with its competitors, the decision has been slammed as a joke by the rest of the industry.

"For the exchanges they want to make exempt," Primus boss Ravi Bahtia told ZDNet.com.au, "no one can get in there anyway. [Telstra] either declares them to be full or it takes you 12 months to get in. This whole regulatory arena in Australia is getting more curious by the minute."

Bahtia said the Tribunal was out of touch with the business sector. "They keep handing out rulings based on legal presentations made to them. It is about they talk to business people face to face," he said.

A Telstra spokesperson said, "In granting the exemptions the ACT has recognised the highly competitive market that now exists in CBD and metropolitan areas."

An AAPT spokesperson reckoned the decision meant Telstra could now block its competitors from accessing its exchanges. "[It] concludes that Telstra would be able to refuse supply of wholesale voice services in an exchange where there are three competitors with DSLAMs (ADSL multiplexers), even though none of these three DSLAMs is capable of providing an alternative voice service," a spokesperson told ZDNet.com.au.

Optus' General Manager, Regulatory Affairs Andrew Sheridan, said the decision showed why regulation over Australia's telecommunications sector was in need of an overhaul. "It is hard to see how competition and customers will benefit from this decision," said Sheridan. "It reflects the culmination of a long campaign by Telstra against the current regulations, forcing the Tribunal into a corner on legal technicalities."

Yesterday's decision follows the ACCC's recent change to its pricing principals for access to Telstra's Unconditioned Local Loop Services (ULLS). ULLS enable the provision of so-called "naked DSL" services, promoted heavily by iiNet. The current rate of $14.30 for ULLS access is set to increase to $23.60 in 2011-12.

According to iiNet's regulatory affairs spokesperson, Steve Dalby, the Tribunal's decision yesterday was consistent with the ACCC's recent decision to raise the price of ULL while lowering the price of Line Sharing Services (LSS), and that it would threaten its investments in DSLAMs.

"[The Tribunal] has justified the exemption on the basis that companies like us are providing naked DSL. We're providing a broadband service, and they're saying therefore there is enough competition in the wholesale market to remove exemptions. They're telco services, but they're not the same sort," he said.

"For the last 12 years, the ACCC has been encouraging the use of ULL as a path to full facilities-based competition. Now they're saying you should buy wholesale ADSL and resell it," he said.

Dalby said the new pricing principals, which would only apply where the ACCC intervenes in a price dispute, would damage its naked DSL strategy. The ISP added around 67,000 naked DSL customers over the past 12 months.

Topics: Telcos, Government, Government AU, Optus, Telstra

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

16 comments
Log in or register to join the discussion
  • hahaha

    lol!
    anonymous
  • NBN

    Let's just hope the NBN goes ahead so that all the arguments over access to the last mile can be removed. It's painful to have to read about it every other day.
    anonymous
  • Last Mile

    This decision is neither about the NBN or the last mile. It is about the use of Telstra hardware to supply voice services. In the end it would seem some Telcos took the "cheap" option and installed hardware to supply data only, but relied on Telstra hardware to supply a voice service. The ACCC has now simply made a decision that if you want to be a real Telco, it is now time to supply your own hardware to deliver these services. Access to the last mile via ULL has not changed (except for ongoing access pricing reviews).

    The way I see it, the ACCC has leveled the playing field. Because the Telcos are now fuming only gives credibility to Telstra's argument that these Telcos were on a pretty good deal while the ACCC allowed competition to develop. Now that it has developed, it's now time to stand on your own two feet.
    anonymous
  • The umpire(s).

    Hello Frank,

    I believe they took the cheap option (as would we all) because it was law to do so.

    It was law because Telstra inherited the PSTN and regulations were therefore required to lessen Telstra's "initial" 100% monopoly clientele.

    So the nationwide PSTN received by Telstra was an even cheaper but ultimately much more lucrative option for Telstra, than anything their opponents have gained (just check Telstra's profits for clarification).

    The level playing field is a furphy and will never eventuate (sans NBN) because Telstra did received the PSTN. Yes Telstra was later bought and is owned by shareholders, but after Telstra received the network.

    But it now seems with further competition, some regulations which were initially required, are now being seen as becoming superseded, by the umpire(s).

    I have castigated Telstra's cheer girls for whinging about the ACCC (and to a lesser extent ACT) verdicts, in the past. So relating to these two new verdicts, whether we agree or not, it would be hypocritical of us to be like Telstra and now chuck a tantrum, I feel.

    It will be interesting to see if Telstra's competitors do a Telstra and trudge off to court though!

    There's no point in having an umpire and saying what a great bloke he is, when you agree with his verdicts. But then becoming no better than whiny Telstra and complaining when the verdict goes the other way.

    If this is the umpires decision, so be it!
    anonymous
  • @Last Mile

    True, but that doesn't allieviate from the issue of competitors getting their own DSLAMs into the exchanges so they can compete. Whoever controls the last mile controls access to it and if Telstra say "no you can't put a DSLAM in that exchange" then that's less competition for them.

    My point about when the NBN gets rolled out (assuming it gets rolled out) will mean that the last mile will be controlled by a wholesaler and not a retailer, so from their perspective it's better to have as many providers as possible in each location as each one would generate revenue for them. The playing field won't be level until the last mile is out of the hands of a retail provider.
    anonymous
  • Why do Australians get screwed over?

    Because people let these telco's or Telstra take advantage of us.
    anonymous
  • @The umpire(s).

    Hi RS,

    You may also want to look at http://www.commsday.com/node/465. I also details some implications for the NBN
    anonymous
  • Think carefuly what you wish for

    Hi Terry, I would be think carefully what you are wishing for. Just becasue a company is wholesale only don't mean they will be any cheaper. In fact they may be able to charge what they like, because they won't be saddled with a retail business
    anonymous
  • Nomenclature

    "The Australian Competition Tribunals'... "

    The apostrophe is in the wrong place. The 'tribunal' is a singular entity.
    anonymous
  • Apostrophe

    And I sure know where I'd like to shove the ACT's apostrophe !
    anonymous
  • Read my comment

    I was never talking about price, I was talking about accessibility.

    Competition can't exist if the wholesale provider is also competing on a retail level, and that wholesale provider can simply deny their competitors wholesale access.

    You're right access to the wholesale network may well end up being more expensive, but considering in the current situation competitors can be flat out denied access, paying more and having access seems like the far better option.
    anonymous
  • Knifes edge

    Now many will see this decision as wrong, some will see it as right, either way its not about the end user.

    Its about what company is forced to do by regulation and that effects both investment and the health of a company.

    The ACCC may have justification as does Telstra in this decision. The cost to supply services to Other companies who have no choice but to piggy back on their services because they don't have the investment dollars to roll out their own infrastructure shouldn't complain. After all if they expect to get get it for nothing, Telstra would collapse and make things twice as bad.

    If people are looking for a scapegoat they need to blame poorly informed and poor decision making against past and current government as well as Telstra, after one dancing alone does not create a situation.
    anonymous
  • Thanks

    Thanks Steve, that was very interesting!
    anonymous
  • Monopoly

    I hope the govt are not going to replace one monopoly with an even more expensive monopoly
    anonymous
  • @hahaha

    ***lol*** Karma, Telstra to be sepereted.
    anonymous
  • Anthony No-brain

    Telstra created their infrastructure during an extended period of no-competition & piggy-backing off the publicpurse until they were making zillions. They were also ripping everyone off so badly that the Gov't of the day decided to bring in a little competition.

    How do you suppose another company would achieve the same infrastructure that Telstra has without that kind of support. You dipstick.
    anonymous